Table of Contents
Net Income
What is Net Income?
Net income is the profit your business earns after expenses and allowable deductions. It represents the amount of money remaining after all operating expenses, taxes, interest, and preferred stock dividends have been deducted from a company's total revenue.
The total revenue in an accounting period subtracting (minus) all expenses during the same period. Net income is your actual take-home pay after all adjustments.
Net Income Formula
The formula for net income is as follows:
Total Revenue - Total Expenses = Net Income
Net Income Calculation
Net income is found on the last line of the income statement, which is why it's often referred to as the bottom line. Let's look at a hypothetical income statement for Company XYZ:
| Inclusive | Costs (INR) |
|---|---|
| Total Revenue | 10,00,000 |
| Costs of Goods Sold | 5,00,000 |
| Gross Profit | 5,00,000 |
| Operating Expenses | 2,00,000 |
| Rent | 70,000 |
| Utilities | 50,000 |
| Depreciation | 50,000 |
| Total Operating Cost | 3,70,000 |
| Interest Expenses | 50,000 |
| Taxes | 50,000 |
| Net Income | 30,000 |
By using the formula we can see that:
Net Income= 10,00,000 - 5,00,000 - 3,70,000 - 50,000 - 50,000 = INR 30,000
All efforts have been made to ensure the information provided here is accurate. However, no guarantees are made regarding correctness of data. Please verify with scheme information document before making any investment.
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